The period's service cost

Learning objectives

• Explain that current service cost is determined using the assumptions set at the start of the period.L2
• Calculate current service cost from the data of a case.L2

Normative references

• IAS 19 §122ACurrent service cost is determined using the actuarial assumptions determined at the start of the annual reporting period, unless a remeasurement follows a plan amendment, curtailment or settlement, after which the assumptions used for that remeasurement apply for the remainder of the period (2018 amendments).

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• For year N, the actuary of Hauvel SA attributes to services rendered during the year a benefit of {benefit}, payable in {years} to plan members (case data). The discount rate set at the start of the year was {rate_open}; the rate at the reporting date is {rate_close}. No plan amendment, curtailment or settlement occurred during the year. Calculate the service cost for the year.L2
• Rilmar SA closes its books on 31 December. No amendment, curtailment or settlement of its defined benefit plan occurred during year N. To calculate the service cost for year N, which actuarial assumptions should be used?L2